HomeMy WebLinkAbout14. Adopt Uniform Public Construction Cost Accounting Act (UPCCAA) Page 1 of 38
Item 14.
CENTRAL SAN BOARD OF DIRECTORS
' POSITION PAPER
MEETING DATE: MAY 3, 2018
SUBJECT: CONDUCT PUBLIC HEARING TO CONSIDER ADOPTING RESOLUTION
NO. 2018-008 AND ORDINANCE NO. 300 TO ADOPT THE UNIFORM PUBLIC
CONSTRUCTION COST ACCOUNTI NG ACT (UPCCAA) EFFECTIVE
SEPTEMBER 1, 2018
SUBMITTED BY: INITIATING DEPARTMENT:
PHILIP R. LEIBER, DIRECTOR OF FINANCE ADMINISTRATION-FINANCE
AND ADMINISTRATION
STEPHANIE KING, PURCHASINGAND
MATERIALS MANAGER
REVIEWED BY: EDGAR LOPEZ, CAPITAL PROJECTS MANAGER
JEAN-MARC PETIT, DIRECTOR OF ENGINEERING AND TECHNICAL
SERVICES
ANN SASAKI, DEPUTY GENERAL MANAGER
14
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Roger S. Bailey Kenton L. Alm
General Manager District Counsel
ISSUE
The Uniform Public Construction Cost Accounting Act (UPCCAA) is legislation enacted by the State in
1983 to help promote uniformity of the cost accounting standards, and bidding procedures on construction
work performed or contracted by public entities in the state. It has been adopted by over 1,000 California
local governmental agencies, including 300 special districts.
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BACKGROUND
Sanitary districts are presently required to follow formal bidding procedures for"District Projects" with a
value in excess of$15,000. The UPCCAA provides certain higher bid limits for entities that adopt it
through a formal resolution of their governing body. The comparison of current Central San procedures to
the UPCCAA for public project work, which includes labor, equipment and materials, is as follows:
Current Central San Procedures UPCCAA**
No specific bidding requirements Less than $5,000* $45,000 or less
Informal bidding $5,000*to $15,000 $45,001 to $175,000
Formal bidding More than $15,000 More than $175,000
_* Board authorized increase from $3,500 to $5,000 in December 2017
**AB-2249, which passed in the Assembly Local Government Committee with a vote of 9-0, will amend
the no bid limits from $45,000 to $60,000 and the informal bidding limit from $175,000 to $200,000.
Under the UPCCAA, no specific bidding requirements would apply for public projects $45,000 or less
(pending increase by state legislation to $60,000). These may be performed by Central San's force
account, by negotiated contract, or by purchase order. Also, public projects in an amount of$175,000
(pending increase by state legislation to $200,000) or less could use the informal bidding procedures set
forth in the UPCCAA. Adoption of the UPCCAA by Central San has the potential to significantly reduce
the administrative costs of bidding by eliminating cumbersome paperwork relative to advertising and filing
of reports, and allow for faster procurement, while still retaining a competitive process and containing
project costs.
Previous Assessments of UPCCAA at Central San
Central San has previously made two preliminary assessments of whether adopting the UPCCAA would
be of interest to the District. Based on the 2006 analysis, Central San opted not to participate in the
program. Several factors were cited in this decision, with the overall conclusion that the benefits did not
appear to outweigh the costs (including additional staff time on accounting procedures, bidding procedures
and project management duties). Benefits were considered limited given the relatively few number of
projects in the range of$15,000 to $175,000, and Central San's practice of grouping smaller projects
together for bidding purposes. A"white paper" was prepared in 2014 comparing current policies and
procedures to those under the UPCCAA, and recommended next steps if there was interest in further
evaluation.
As a result, Central San contracted with a consultant to more thoroughly explore the advantages and
disadvantages of adopting the UPCCAA. The consultant has recommended that Central San adopt the
UPCCAA on a pilot program basis for one year to assess if the benefits of the alternative bidding
procedures make contracting for projects under$175,000 simpler and faster, with similar or lower contract
costs than if the formal bidding procedures were used. A copy of the Consultant's Report is included as
Attachment 3. Staff believes that adopting the UPCCAA will help streamline the bidding process to make
it more efficient, especially since more work is expected with the capital improvement program that has
been proposed, which has doubled the capital improvement budget in the next several years and into the
foreseeable future.
Potential Other Benefits
There continue to be projects that staff believes require a high level of administrative work in bidding
requirements that potentially could be avoided through the adoption of the UPCCAA.
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Two such situations when this arises are:
1. Operation departments' planned maintenance work, when in excess of$15,000, may actually be
legally interpreted as repair work, which is a public works project as defined by statute.
2. Work or equipment that is incorporated in a prospective capital improvement budget project, and
where a system or equipment may prematurely experience failure and/or where equipment requires
pre-purchase by Central San, and so is unexpectedly segmented from the project by Capital
Projects.
Under these circumstances, Purchasing must direct questions to District Counsel on behalf of the
departments so that counsel might determine:
1. if the work and/or purchases should be classified as a public works project, requiring Central San to
follow the formal public contract code bidding process along with other related District procedures;
or
2. If some other workaround to the prescribed formal bidding requirements is viable. It has not been
possible for Purchasing to codify these exceptions to streamline this process.
Operations departments appropriately seek to use expedited procedures to address their needs, yet the
proposed procurement process may not meet District purchasing procedures or legal bidding
requirements. This can create bottlenecks affecting the timeliness of needed work. With the size of the
capital improvement budget projected to increase significantly in the years ahead, Central San is likely to
face more of these bottlenecks. These delays could be overcoming through staff additions, or through
process improvements. Adoption of the UPCCAA is viewed as a key process improvement that can help
address these potential bottlenecks.
Central San staff considered the net benefits of adopting the UPCCAA at this time through the following
steps:
1. Reviewed past analysis performed by Central San during 2006 and 2014;
2. Retained a consultant to advise Central San on the program and issues regarding implementation.
The consultant's report recommended adopting the UPCCAA on a pilot basis for a period of time to
determine if the advantages outweighed the disadvantages.
3. Discussed the UPCCAA advantages and disadvantages with staff and District Counsel;
Court Ruling - Ross Valley Sanitary District
During the evaluation of the UPCCAA performed by the consultant, another factor arose that potentially
mitigated the attractiveness of the UPCCAA for sanitary districts. A court ruling in 2016 involving the Ross
Valley Sanitary District held that the statute requiring competitive bidding for sanitary district projects
exceeding $15,000 does not apply when the district engages its own work force to perform the work.
Adopting the UPCCAA would eliminate some of the benefits of this current favorable ruling to Sanitary
Districts, restricting use of District forces for projects over$45,000.
Advantages/Disadvantages of Adopting the UPCCAA
Factors weighing for and against the program are summarized here:
1. Adopt the UPCCAA program:
Advantages
• Increase threshold for bidding public project work from $15,000 to
$45,000 (and as periodically increased by statute)
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• Streamlined bidding process for public project work from $45,000 to
$175,000 (both limits are periodically increased by statute)with award
to lowest responsible bidder.Advantages of the streamlined bidding
process cited by agencies who have adopted the UPCCAA include:
• Expedited contracting for small projects.
• Potentially, a faster award process.
• Improved timeliness of project completion.
• Simplified administration.
• Elimination of considerable red tape and cumbersome
paperwork relative to advertising and filing of reports.
• With respect to the advertising/notification process for work
subject to informal bidding, the UPCCAA allows agencies to (1)
maintain a bidder's list by type of work; (2) notice particular
construction trade journals; or(3) do both.
Disadvantages
• Lose the current ability(through Ross Valley decision)to perform
work with in-house staff without regard to project size.
2. Do not adopt the UPCCAA program
Advantages
• Allows District staff to perform public project work without dollar limits,
for as long as the court decision in the Ross Valley decision stands.
Disadvantages
• The Ross Valley decision benefits may in the future be limited through
legislation.
After significant internal discussion and consideration, staff presently believes that the benefits of adopting the
UPCCAA may exceed the advantages of the status quo. Purchasing receives an estimated 20 to 40 high
priority/rush requests per year related to repairs that exceed the current$15,000 threshold, but are below the
$45,000 threshold available with adoption of the UPCCAA. Accordingly, this type of work could be completed
quicker, and more cost effectively under the UPCCAAthrough avoided administrative staff time costs. Staff
administrative time savings involve:
• Staff (and District Counsel)would not have to determine if projects in the range of$15,000 to
$45,000 are or are not a"District Project" requiring formal bidding.
• Staff (and District Counsel)would not have to determine work-arounds for meeting the formal bid
requirements for procurements in this range that are not typical construction projects performed by a
general contractor(and administered by Capital Projects).
With respect to the status quo benefit, Central San is not presently staffed to take advantage of the current
ability(from the Ross Valley decision)to perform significant work through force-account resources.
Consultant Recommendation to Adopt UPCCAA on Pilot Basis
The consultant that advised Central San on the UPCCAA during 2016/2017 advised Central San to
consider adopting the UPCCAA on a pilot basis for a one-year period in order to determine if the
advantages exceed the benefits of the status quo allowances for unlimited force account work. This would
be helpful in gaining a full understanding of the advantages of the "informal bidding process" for projects in
the range of$45,000 to $175,000.
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Central San could proceed with testing the UPCCAA by adopting the attached proposed resolution and
ordinance, which could subsequently be terminated by the Board if, after a suitable pilot phase, the
benefits of the UPCCAA do not appear worthwhile. As noted by the consultant:
"Since adopting the UPCCAA is voluntary, it is not an irrevocable decision; if at the end of
the pilot program the District has not experienced the potential benefits, it can discontinue the
UPCCAA provisions and return to the current policies..."
Based on feedback by the Administration Committee, staff would prepare an informal assessment for
presentation to the Administration Committee this December, and a more formal assessment after two
years of operations with the UPCCAA to evaluate the net benefits of the program. Evaluation criteria and
considerations will include:
• the number of projects that benefited from higher thresholds versus the existing $15,000 threshold
today
• the number of projects that required consulting with District Counsel related to bidding thresholds
and potential workarounds
• any significant issues encountered in the administration of the program
If that assessment concluded that Central San has not benefitted from adoption of the UPCCAA, then the
program could be terminated (through Board action), with a reversion back to existing practices.
Attachment 4 sets forth the steps that would need to be taken to implement and/or rescind the UPCCAA.
The resolution provides for an effective date of September 1, 2018, which will provide time for Central
San to execute the steps shown, including development and adoption of informal bidding procedures, and
an informal bidder's list.
ALTERNATIVES/CONSIDERATIONS
The primary consideration is whether or not to adopt the UPCCAA.
If the UPCCAA is adopted, staff intends to bring forth for the Board's consideration prior to the
September 1, 2018 effective date a change to the General Manager's authority to align contract award
authority with the informal bid limit available under the UPCCAA(presently$175,000, or as periodically updated
by statute). Presently, the General Manager can award contracts for public works/district projects below
$100,000. To further streamline the contracting process, the Board could also at that time delegate the authority
to award public works/District Projects up to the informal bid limit in the UPCCAA. If granted this authority, to
ensure transparency, a quarterly report of such awards would be presented to the Board.
FINANCIAL IMPACTS
Once the program is in place and the procedures set forth, there could be a reduction in cost for
processing small projects under the UPCCAA. However, there will be some additional costs in setting up
and getting the program to become operational.
COMMITTEE RECOMMENDATION
On January 30, 2018, the Administration Committee recommended Board adoption of the UPCCAA.
RECOMMENDED BOARD ACTION
Adopt the proposed resolution and ordinance (Attachments 1 and 2, respectively)for Central San to adopt
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the Uniform Public Construction Cost Accounting Act effective September 1, 2018.
Strategic Plan re-In
GOAL THREE: Be a Fiscally Sound and Effective Water Sector Utility
Strategy 2- Manage Costs
GOAL FIVE: Maintain a Reliable Infrastructure
Strategy 1 - Manage Assets Optimally Throughout Their Lifecycle, Strategy 2- Facilitate Long-term Capital Renewal
and Replacement
GOAL SIX: Embrace Technology, Innovation and Environmental Sustainability
Strategy 2- Evaluate Business Processes and Optimize Business Operations
ATTACHMENTS:
1. UPCCAA Proposed Resolution
2. UPCCAA Proposed Ordinance
3. UPCCAA Consultant Report
4. UPCCAA Implementation Steps
5. UPCCAA Public Hearing Presentation
May 3, 2018 Regular Board Meeting Agenda Packet- Page 142 of 275
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RESOLUTION NO. 2018-008
A RESOLUTION OF THE
CENTRAL CONTRA COSTA SANITARY DISTRICT
ELECTING TO BECOME SUBJECT TO ALTERNATIVE BIDDING AND
UNIFORM PUBLIC CONSTRUCTION COST ACCOUNTING PROCEDURES
WHEREAS, prior to the passage of Assembly Bill No. 1666, Chapter 1054, Statutes of
1983, which added Chapter 2, commencing with Section 22000, to Part 3 of Division 2
of the Public Contract Code, existing law did not provide a uniform cost accounting
standard for construction work performed or contracted by local public agencies; and
WHEREAS, Public Contract Code Section 22000 et seq., the Uniform Public
Construction Cost Accounting Act (Act), establishes such a uniform cost accounting
standard; and
WHEREAS, the Commission established under the Act has developed uniform public
construction cost accounting procedures for implementation by local public agencies in
the performance of or in the contracting for construction of public projects; and
WHEREAS, the Act provides for alternative bidding procedures for construction
projects that have the potential to significantly reduce the administrative costs of
bidding and allow for faster project completion, while still retaining a competitive
process and containing project costs.
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Central Contra
Costa Sanitary District (Central San) that it hereby elects effective September 1, 2018
under Public Contract Code Section 22030, to become subject to the uniform public
construction cost accounting procedures set forth in the Act and to the Commission's
policies and procedures manual and cost accounting review procedures, as they may
each from time to time be amended, and directs the Secretary of the District to notify the
State Controller forthwith of this election.
BE IT FURTHER RESOLVED THAT this resolution shall become effective immediately
upon passage and adoption.
PASSED AND ADOPTED at a regular meeting by the Board of Directors of Central San
on this 3rd day of May 2018 by the following vote:
AYES: Members:
NOES: Members:
ABSENT: Members:
James A. Nejedly
President of the Board of Directors
Central Contra Costa Sanitary District
County of Contra Costa, State of California
May 3, 2018 Regular Board Meeting Agenda Packet- Page 143 of 275
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Central Contra Costa Sanitary District
Resolution 2018-008
Page 2of2
COUNTERSIGNED:
Katie Young
Secretary of the District
Central Contra Costa Sanitary District
County of Contra Costa, State of California
Approved as to form:
Kenton L. Alm, Esq.
Counsel for the District
May 3, 2018 Regular Board Meeting Agenda Packet- Page 144 of 275
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ORDINANCE NO. 300
AN ORDINANCE OF THE
CENTRAL CONTRA COSTA SANITARY DISTRICT
ESTABLISHING INFORMAL BIDDING PROCEDURES UNDER
THE UNIFORM PUBLIC CONSTRUCTION COSTACCOUNTING ACT
WHEREAS, the Uniform Public Construction Cost Accounting Act (Act) provides for
informal bidding procedures for construction projects that have the potential to
significantly reduce the administrative costs of bidding and allow for faster project
completion, while still retaining a competitive process and containing project costs; and
WHEREAS, the District has elected to become subject to the uniform public
construction cost accounting procedures under the Act, thereby allowing it to adopt
informal bidding procedures for certain construction projects with values under specified
dollar limits.
NOW, THEREFORE, the Board of Directors of the Central Contra Costa Sanitary
District (Central San) does ordain to amend the Central Contra Costa Sanitary District
Code as follows:
Chapter 2.36.010(A.) of the Central Contra Costa Sanitary District Code is amended to
read as follows:
Chapter 2.36 - PURCHASING AND MATERIALS POLICY
Sections:
2.36.010 - Policy.
A. It is the Central Contra Costa Sanitary District's policy to perform
procurement activities in conformance with all applicable laws and in a
manner consistent with adopted purchasing policies. The authority of
District Employees to both procure goods and services and to bind the
District in procurements shall be as authorized and limited in adopted
purchasing policies and procedures.
B. District policies and procedures shall include the option to undertake and
procure contracts for District Projects under specified dollar limits in a
manner in conformance with the Uniform Public Construction Cost
Accounting Act (Public Contract Code sections 22000-22045) and the
California Uniform Construction Cost Accounting Commission's policies
and procedures, when applicable and beneficial to the District.
C. The District's administrative department's purchasing and materials
division will contract for purchase, rent or lease of materials, supplies, and
equipment, and secure services for the District's use with the objective
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Ordinance No. 300
Page 2 of 2
Central Contra Costa Sanitary District
that such goods and services will be available at the proper time, in the
proper place, in quantity, quality, and price so as to receive maximum
value; and to maintain inventories of goods at minimum levels consistent
with the user department's needs while allowing the maximum
conservation of the District's funds.
This ordinance shall be a general regulation of the District and shall be published once
in the Contra Costa Times and the San Ramon Valley Times, newspapers of general
circulation within the District, and shall be effective on the eighth calendar day following
such publication.
PASSED AND ADOPTED at a regular meeting by the Board of Directors of Central San
on this 3rd day of May 2018 by the following vote:
AYES: Members:
NOES: Members:
ABSTAIN: Members:
James A. Nejedly
President of the Board of Directors
Central Contra Costa Sanitary District
County of Contra Costa, State of California
Katie Young
Secretary of the District
Central Contra Costa Sanitary District
County of Contra Costa, State of California
Approved as to form:
Kenton L. Alm, Esq.
Counsel for the District
May 3, 2018 Regular Board Meeting Agenda Packet- Page 146 of 275
Page 11 of 38
Central Contra Costa
Sanitary District
Uniform Public Construction Cost
Accounting Act Review
March 2017
William C. Statler
Fiscal Policy■Financial Planning■Analysis■Training■Organizational Review
May 3, 2018 Regular Board Meeting Agenda Packet- Page 147 of 275
Page 12 of 38
TABLE OF •
REPORT PURPOSE 1
SUMMARY OF FINDINGS AND RECOMMENDATIONS 1
BACKGROUND 2
Previous District Analysis of the Uniform Public Construction Cost Accounting Act 2
Current State Law 3
Impact of Recent Appellate Court Descison 3
UPCCAA Adoption in 1983 4
FINDINGS AND RECOMMENDATIONS 5
Current Procedures Versus UPCCAA 5
Adoption by Other Agencies 5
Summary of Advantages and Disdvantages 6
Recommendations 7
IMPLEMENTATION 7
Formal Actions 7
New Procedures 7
Board Involvement in the Formal Bid Process 10
Assessing the Pilot Program 10
SUMMARY 11
APPENDIX
A. Sample Resolution
B. Sample Ordinance
C. Trade Journals
D. Sample Cost Accounting Worksheet
May 3, 2018 Regular Board Meeting Agenda Packet- Page 148 of 275
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124 Cerro Romauldo Avenue
San Luis Obispo, CA 93405
• 805.544.5838 ■ Cell: 805.459.6326
bstatler@pacbell.net
www.bstatier.com
William C. Statler
Fiscal Policy ■ Financial Planning ■ Analysis ■ Training ■ Organizational Review
Central Contra Costa County Sanitary District
Uniform Public Construction Cost Accounting Act Review
REPORT PURPOSE
The purpose of this report is to explore more deeply the advantages and disadvantages of
adopting the Uniform Public Construction Cost Accounting Act(UPCCAA)policies and
proceduresin:
• Contracting for construction projects by using the alternative bidding procedures allowed
under the UPCCAA.
• Making greater use of in-house staff("force account") in performing construction work.
SUMMARY OF FINDINGS AND RECOMMENDATIONS
Findings
• Use of Alternative Bidding Procedures for Simpler,Lower-Cost Projects. For
construction contract work, the District currently must use formal bidding procedures for
any construction contracts greater than $15,000. However,under the UPCCAA, the
District can use informal bidding procedures for construction contracts of$45,001 to
$175,000 (with no specific requirements for projects of$45,000 or less).
For simpler, lower-cost projects, this has the potential to significantly reduce the
administrative costs of bidding and allow for faster project completion,while still
retaining a competitive process and containing project costs. In fact,because the process
is simpler for contractors too, it has the potential to reduce construction costs as well.
As discussed below, while the UPCCAA also provides greater flexibility in performing
work with in-house staff, most agencies that have adopted the UPCCAA did so for the
greater flexibility in contacting for lower-cost, simpler projects—not greater use of in-
house staff for construction work.
• Use of In-House Staff in Performing Even Smaller Projects. For most local government
agencies in California, the use of"force account" (completing projects using in-house
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Uniform Public Construction Cost Accounting Act Review
staff, materials and equipment) is limited to $5,000 to $15,000 (depending on the agency
type and applicable Public Contract Code provisions). The District's current policy
limits the use of force account to construction work of$15,000 or less.
For most agencies, the UPCCAA typically provides greater flexibility in using in-house
staff as the use of force account is allowed up to $45,000. However,based on the
circumstances unique to sanitary districts and a recent, unexpected State appeal court
ruling, the District is currently allowed to do an unlimited amount of construction work
with in-house staff.
Accordingly, if the District decides to adopt procedures under the UPCCAA, it will be
limited to in-house work of$45,000. (This includes staffing costs, materials, equipment use
and indirect costs.)
In short, the District will benefit under the alternative bidding procedures from simpler
contracting but due to unique circumstances for sanitary districts, it will have more
restrictions on the use of in-house forces ($45,000 versus unlimited).
However, keep in mind that until the recent appeal court decision—which was a surprise—
the conventional wisdom was that the District was limited to $15,000 for in-house work. As
such, rather than being a limitation, the $45,000 limit is an easing of constraints compared
with current policies.
Recommendation
I recommend that the District adopt the UPCCAA on a pilot program basis for one year to
assess if the alternative bidding procedures make contracting for projects of$175,000 or less,
simpler and faster, with similar or lower contract costs, than if formal bidding procedures
were used; and if the $45,000 force account limit poses undue administrative burdens in
complying with the Act's cost accounting requirements.
Adopting the UPCCAA is not an irrevocable decision: if at the end of the pilot program the
District has not experienced the potential benefits, it can discontinue using the UPCCAA
provisions and return to its current policies (with the potential of amending current policies
and allowing unlimited use of force account in performing projects).
BACKGROUND
Previous District Analysis of the UPCCAA
The District has previously made two preliminary assessments of whether adopting
construction project contracting policies under the UPCCAA makes sense:
• Analysis prepared in December 2006, which recommended against adopting the
policies and procedures set forth in the UPCCAA.
• "White Paper"prepared in May 2014 that again reviewed the District's current
policies and procedures; those under the UPCCAA; preliminary assessment of
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Uniform Public Construction Cost Accounting Act Review
advantages and disadvantages; and recommended"next steps" if there was interest
in further evaluating this issue.
As a result of the May 2014 review, the District contracted with William C. Statler to
further explore the advantages and disadvantages of adopting the UPCCAA in more
efficiently and effectively completing construction projects. The workscope included
reviewing current District policies, analyzing UPCCAA requirements and interviewing
key staff.
Current State Law
Public Contract Code (PCC) 20800 sets forth the contracting requirements for construction
projects for sanitary districts. It defines as "District Projects:"
"any construction, reconstruction, alteration, enlargement, renewal, or replacement of
sewer facilities which the district is authorized to do, including, but not limited to, the
furnishing of supplies or materials for any such work. "
Under these provisions, formal bidding is required for all projects of$15,000 or more (with
some exceptions, such as emergency work.) For many local agencies, the restriction on
formal bidding is even greater: for example, for cities, the limit is $5,000 (an amount that has
not changed in over 80 years).
And until recently, it was the conventional wisdom that this section also limited the use of
"force account" (in-house staff)to projects of$15,000 or less (which is the District's current
policy). However, as discussed below, this is no longer the case based on a recent appellate
court decision (which has gone uncontested): the District may now perform an unlimited
amount of construction work with in-house staff.
Impact of Recent Appellate Court Decision
There are over 70 Articles in Section 21000 of the Public Contract Code setting forth
construction project bidding and force account procedures depending on the type of agency
(counties, cities, schools and a wide range of special districts). While the language is the
same or similar for most local agencies in the various Articles, there are subtle differences in
some cases. Until an appellate ruling in January 2016 (and passage of time since then for any
contesting appeals), the conventional wisdom was that use of in-house resources to complete
construction work was limited to $15,000 (except in limited circumstances, such as
emergencies).
However, in the appellate court ruling in Construction Industry Force Account Council, Inc.
v. Ross Valley Sanitary District(http://www.courts.ca.gov/o/opinions/archive/A139069.PDF),
the court found that sanitary districts, based on the language in PCC 20800, are not limited in
the amount of construction work that can be performed in-house. Again, this ruling was
unexpected, and is based on language that appears to be applicable only to sanitary districts.
For virtually all other types of local government agencies in California, the conventional
wisdom regarding limits on the use of in-house staff remains in place.
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Uniform Public Construction Cost Accounting Act Review
UPCCAA Adoption in 1983
The UPCCAA (PCC 22000)was adopted in 1983 in order to provide local government
agencies greater flexibility in using in-house use staff in completing construction projects and
in using"alternative bidding procedures" for less complex, lower cost projects, summarized
as follows:
• Alternative Billing Procedures. There are no specific bidding procedures for
construction projects of$45,000 or less (they can be let by negotiated contract or
purchase order); and informal bidding procedures may be use for projects of$175,000 or
less. (Projects greater than $175,000 require formal bidding procedures.)
• Use of In-House Staff. If the agency adopts the UPCCAA cost accounting provisions, it
may use in-house staff for projects of$45,000 or less.
Administration. The UPCCAA creates the California Uniform Construction Cost
Accounting Commission,which is responsible for administering the Act and preparing an
implementation procedures manual. The 14-member Commission includes thirteen members
appointed by the State Controller(seven members representing the public sector such as
counties, cities, school districts and special districts; and six members representing the
private sector, such as contractors and unions), with one designated member from the
Contractors' State License Board.
Every five years, the Commission is responsible for considering whether there have been
material changes in public construction costs and making recommendations to the State
Controller regarding adjustments to the bidding procedure monetary limits. Several increases
have been made to the monetary limits since its adoption. For example, the threshold in 1983
when the UPCCAA was adopted was $25,000 for informal bidding procedures and $100,000
for formal bids.
Definition of Construction Projects. The UPCCAA defines construction projects ("Public
Projects") slightly differently than the PCC 20800, which the District currently operates
under:
"Public project"means any of the following:
(1) Construction, reconstruction, erection, alteration, renovation, improvement,
demolition, and repair work involving any publicly owned, leased, or operated facility.
(2)Painting or repainting of any publicly owned, leased, or operated facility.
(3)In the case of a publicly owned utility system, 'public project"shall include only the
construction, erection, improvement, or repair of dams, reservoirs,powerplants, and
electrical transmission lines of 230,000 volts and higher.
The UPCCAA also defines maintenance work, which is not subject to UPCCAA bidding and
use of in-house staff accounting procedures:
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Uniform Public Construction Cost Accounting Act Review
"Public project"does not include maintenance work. For purposes of this section,
"maintenance work"includes all of the following:
(1)Routine, recurring, and usual work for the preservation or protection of any publicly
owned or publicly operated facility for its intended purposes.
(2)Minor repainting.
(3)Resurfacing of streets and highways at less than one inch.
(4)Landscape maintenance, including mowing, watering, trimming,pruning,planting,
replacement of plants, and servicing of irrigation and sprinkler systems.
(5) Work performed to keep, operate, and maintain publicly owned water,power, or
waste disposal systems, including, but not limited to, dams, reservoirs,powerplants, and
electrical transmission lines of 230,000 volts and higher.
FINDINGS AND RECOMMENDATIONS
Current Procedures Versus UPCCAA
The following compares key provisions of the UPCCAA with current District policy(which
is based on PCC 20800) in contracting for construction work:
Current District Procedures
No specific bidding requirements No specific bidding requirements
• Less than $3,500 • $45,000 or less
Informal bidding Informal bidding
• $3,500 to $15,000 • $45,001 to $175,000
Formal bidding Formal bidding
• More than $15,000 • More than $175,000
Adoption by Other Agencies
Over 1,000 local government agencies have adopted the provisions of the UPCCAA as of
March 2017:
• Counties 40
• Cities 221
• Schools 432
• Community Colleges 46
• Special Districts 301
For most of these agencies, the purpose of adopting UPCCAA provisions was for greater
contracting flexibility, not greater use of in-house staff. Like the District, as a practical
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Uniform Public Construction Cost Accounting Act Review I
matter, most of these agencies have limited ability to do expanded construction work with in-
house staff: their staffing is dedicated to day-to-day operations and maintenance. However,
they adopted the UPCCAA procedures for the benefits of simpler procedures in contracting
for less complex, lower cost projects
Summary of Advantages and Disadvantages
The following summarizes advantages and disadvantages of adopting the UPCCAA:
DisadvantagesAdvantages
Alternative Biddin Procedures
Participating agencies report that informal • Implementing new informal bidding
bidding procedures result in: procedures may not be worth the effort.
• Expedited contracting for small projects. • Minor extension of formal bid notice
• Faster award process. from ten days to 14 days.
• Improved timeliness of project
completion.
• Elimination of considerable red tape and
cumbersome paperwork relative to
advertising and filing of reports.
• Simplified administration.
With simpler informal bid procedures for
contractors: potential for lower construction
costs.
Use of In-House Staff
• Greater flexibility for use compared • With the appellate court ruling,
with existing policy($45,000 vs unlimited use of in-house staff is
$15,000). possible. However, making use of this
added flexibility would require Board
approval of revised procedures.
• Implementing cost accounting
requirements may pose undue
administrative burdens.
Work Load Assessment. A "high level"workload assessment by staff indicates that if the
District elects to become subject to the UPCCAA, there would be about 30 formal
construction bids and 20 to 40 informal bids for construction work. Based on my experience
with other organizations and discussions with District staff, very few projects are likely to
trigger the cost accounting requirements for the use of in-house staff.
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Uniform Public Construction Cost Accounting Act Review
Recommendations
As reflected above, while there are a number of likely advantages in becoming subject to the
UPCCAA, there are also possible downsides. Neither of these can be fully assessed based on
the District's circumstances without experience. Accordingly, I recommend that the District
adopt the UPCCAA on a pilot program basis for one year to assess if the alternative bidding
procedures make contracting for projects of$175,000 or less, simpler and faster, with similar
or lower contract costs, than if formal bidding procedures were used; and if the $45,000 force
account limit poses undue administrative burdens in complying with the Act's cost
accounting requirements.
Since adopting the UPCCAA is voluntary, it is not an irrevocable decision: if at the end of
the pilot program the District has not experienced the potential benefits, it can discontinue
using the UPCCAA provisions and return to its current policies (with the potential of
amending current policies and allowing unlimited use of in-house resources in performing
projects).
IMPLEMENTATION
Formal Actions
There are two relatively simple Board actions required for implementation:
• Resolution electing to become subject to the UPCCAA.
• Ordinance adopting informal bidding procedures.
A sample resolution and ordinance are provided in Appendix A and B. After adoption. the
resolution will need to be forwarded to the State Controller's Office at:
Office of the State Controller
Division of Accounting and Reporting
Local Government Policy Section
P.O. Box 942850
Sacramento CA 94250
As recommended by the Commission, the amounts subject to the procedures in Appendix B
reference the UPCCAA, rather than specific amounts. In this way, the dollar limits will
keep pace with construction cost increases over time.
New Procedures
New procedures will be required in implementing the bidding procedures and in-house staff
cost accounting procedures. The Commission has prepared a comprehensive manual for
implementing and managing the UPCCAA's procedural requirements. This manual, last
updated in June 2015, is available on the State Controller's web site at:
hLtp://www.sco.ca.gov/Files-ARD-Local/CUCCAC%20Manual.pd
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Uniform Public Construction Cost Accounting Act Review
Given the availability of this well-written and documented manual combined with the
recommendation for a pilot program, I recommend taking a"lean" approach to revising
procedures: rather than revising the District's extensive, formal policies at this time, develop
interim guidelines as needed.
If the decision at the end of the one-year pilot program is to discontinue using the UPCCAA
procedures, then no unnecessary added work will be incurred. On the other hand, if the
decision is to continue using the UPCCAA, then formal revisions can be made that will
benefit from the District's pilot program experience.
The following is a summary of key provisions that the District will want to cover in its
interim guidelines:
Formal Bid Procedures. While it is likely that the District already provides bid notice far
longer than this for projects that exceed$175,000, the minimum period for notice under the
UPCCAA is four days longer: 14 days compared with the current policy of ten days.
Additionally, the District will be required to provide notice to construction trade journals via
mail, email or fax as specified by the Commission. For the District, this will mean sending
notices to two statewide organizations (Construction Bidboard and McGraw-Hill
Construction Dodge) and at least two of six regional trade journals. These are provided in
Appendix C.
Informal Bidding Procedures. The District will have far greater flexibility in the level of
detail for plans and specifications, depending on the complexity of the project, as well as bid
terms and conditions. For example,under current policy, a bidder's security of 10% of the
bid amount is required for all projects greater than $15,000. While the District retains this
the discretion under the UPCCAA for larger projects even if they are under $175,000, it is no
longer required to do so. And again, depending on the complexity of the project,bid award
evaluation and award can also be much faster. In short, the complexity of the process can be
determined on a case-by-case basis, depending on the nature of the work and what makes
sense under the circumstances.
Moreover, where the District makes the bid process simpler for itself, it also makes the
process simpler for contractors. As such, there is the potential for lower construction costs.
Along with greater discretion in preparing specifications and bid terms, the only other
significant change is notification. The UPCCAA provides three options:
• Maintain a bidders list by type of work.
• Notice to the construction trade journals via mail, email or fax provided in Appendix C.
• Do both.
There are very detailed procedures for developing and maintaining the bidders list, which
may be more work than justified. Accordingly, at least for the pilot program, I recommend
that the District use the simpler"notice to trade journals" approach. (The sample ordinance
in Appendix B reflects this approach.)
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Uniform Public Construction Cost Accounting Act Review
In-House Staff Cost Accounting. The purpose behind the cost accounting procedures set
forth under the UPCCAA is to ensure that agencies do not exceed the $45,000 limit when
informal bidding is required. The standards ensure that all costs are fully accounted for(as a
contractor would), including labor(salary and benefits), materials, subcontracts, equipment
use and overhead.
Given that the goal of cost accounting procedures is to ensure that the use of in-house
resources does not exceed $45,000, it doesn't make sense to formally use these procedures
for minor work. (Conceptually, $2,000 of work might be considered construction under the
UPCCAA; but this so far removed from the $45,000 threshold, it wouldn't make sense to use
detailed accounting procedures for this.)
For this reason, many of the agencies that have adopted UPCCAA procedures only use
detailed cost accounting when it is clear that the work is "construction"versus maintenance;
and if"construction,"that it is likely to approach the $45,000 threshold. While this will
require staff judgment, it is the approach that makes the most sense for the District given
that:
• It is not staffed to take on significant "construction"work subject to the UPCCAA.
• And such, its main goal (like most of the other 1,040 agencies that have adopted the
UPCCAA) is the use of the alternative bidding procedures—not to expand its use of in-
house resources.
Accordingly, it is expected that very few projects —perhaps just one or two per year—will
require detailed cost accounting.
Two steps are recommended in accounting for in-house resources during the pilot program:
• Preparation of a project cost estimate when it appears likely that cost accounting might be
required(a worksheet for this is provided in Appendix D).
• Where the estimate shows a likelihood of approaching the $45,000 threshold, account for
costs using the same format as the estimate in Appendix D. A suggested"rule of thumb:"
if the estimate shows possible costs that are within 60% of the $45,000 threshold(about
$27,000), detailed cost accounting should be used.
Given the few uses expected, the worksheet in Appendix D is recommended over trying to
integrate this into the District's general ledger and project cost accounting system. One of
the purposes of the pilot program is to assess how often and how complex cost accounting
will be. For this reason, the District should begin with a simple, "exception-based" approach.
There are two conceptual issues in accounting for in-house costs:
• Indirect(overhead) costs. The Manual provides two options for the District. It can use
its own indirect cost rate (225% for 2017-18), which is composed of benefits and non-
work hours (120%) and administrative overhead (105%). The Manual also allows the use
of 30% for administrative overhead. It is the District's option as to which approach to use
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Uniform Public Construction Cost Accounting Act Review
(keeping in mind that the District would still need to use the 120%rate for staffing costs).
There is a slight fiscal advantage in using the 30%rate, as conceptually, more work could
be accomplished within the $45,000 threshold. However, in the interest of simplicity, at
least during the pilot program, I recommend that the District use its adopted overhead
rate.
• Equipment use rates. The Manual sets forth extensive procedures for developing
agency-specific equipment use rates. However, it also allows using established third-
party sources for this and offers several options, including equipment use rates set by
Caltrans. I recommend this as the simplest approach. The Caltrans equipment use rate
manual is on its web site at:
hllp://www.dot.ca.gov/hq/construe/eqrr/Book 2017.pdf
Board Involvement in the Formal Bid Process
Like many local government agencies, the Board is currently involved in the formal bid
process at the "contract award" stage. There are two drawbacks with this late involvement:
• Detailed bid packages defining the project and bid process have already been prepared,
limiting the Board's input and making any changes awkward at best (and most likely
requiring the issuance of new invitations for bids). This requires added staff work—
which was likely very extensive to begin with—and delays the construction project.
• When the Board is involved, it is often for the relatively simple ministerial task of
determining who submitted the lowest bid.
It makes more sense to move the Board's involvement to an earlier stage, where it can better
exercise policy discretion: approval of the bid package and authorization to invite bids.
This provides the Board with meaningful discretion on whether to move forward with the
project at all and at what cost; and to define the project work scope and any key terms and
conditions.
However, once these parameters are in place, the recommended approach delegates to staff
the ministerial action of determining who submitted the lowest bid and awarding the contract.
In those few cases where bids come in above budget or there are other unexpected issues, bid
award would return to the Board. This revision will make contracting for construction
projects more efficient while retaining appropriate internal controls and more meaningfully
involving the Board in the formal bid process.
Assessing the Pilot Program
At the end of the pilot program, the staff should report back to the Board with its assessment
of the results. The report should:
• Identify the number of formal and informal bids awarded; and number of in-house
projects completed that required the use of detailed cost accounting procedures.
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Uniform Public Construction Cost Accounting Act Review
• Discuss advantages and disadvantages encountered in using alternate bidding procedures;
and any undue administrative hardships in accounting for the use of in-house resources.
• Based on this assessment, recommend whether the District should continue using the
UPCCAA procedures; and if so, any policy and procedure changes that should be made
based on the pilot program experience.
SUMMARY
This report outlines the provisions of the UPCCAA and compares them with the District's
current policies for construction projects (which in turn are based applicable State public
contract code requirements).
After considering advantages and disadvantages, it recommends going forward with adopting
the UPCCAA on a pilot program basis for one year to assess if the alternative bidding
procedures make contracting for projects of$175,000 or less, simpler and faster, with similar
or lower contract costs, than if formal bidding procedures were used; and if the $45,000 force
account limit poses undue administrative burdens in complying with the Act's cost
accounting requirements. If at the end of the pilot program the District has not experienced
the potential benefits, it can discontinue using the UPCCAA provisions and return to its
current policies.
The report also addresses implementation issues, including recommending that the District
consider engaging the Board earlier in the formal bid process; and assessment factors that
should be considered at the end of the pilot program.
I appreciate the opportunity to serve the District in preparing this assessment and
I am available to answer any questions concerning its findings and recommendations.
APPENDIX
A. Sample Resolution
B. Sample Ordinance
C. Trade Journals
D. Sample Cost Accounting Worksheet
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Page 24 of 38
Appendix A
Sample Resolution
RESOLUTION No. 2017-
A RESOLUTION OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT
ELECTING TO BECOME SUBJECT TO ALTERNATIVE BIDDING AND
UNIFORM PUBLIC CONSTRUCTION COST ACCOUNTING PROCEDURES
WHEREAS, prior to the passage of Assembly Bill No. 1666, Chapter 1054, Statutes of 1983,
which added Chapter 2, commencing with Section 22000, to Part 3 of Division 2 of the Public
Contract Code, existing law did not provide a uniform cost accounting standard for construction
work performed or contracted by local public agencies; and
WHEREAS, Public Contract Code Section 22000 et seq., the Uniform Public Construction Cost
Accounting Act, establishes such a uniform cost accounting standard; and
WHEREAS, the Commission established under the Act has developed uniform public
construction cost accounting procedures for implementation by local public agencies in the
performance of or in the contracting for construction of public projects; and
WHEREAS, the Act provides for alternative bidding procedures for construction projects that
have the potential to significantly reduce the administrative costs of bidding and allow for faster
project completion, while still retaining a competitive process and containing project costs.
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of Central Contra Costa
Sanitary District that it hereby elects under Public Contract Code Section 22030 to become
subject to the uniform public construction cost accounting procedures set forth in the Act and to
the Commission's policies and procedures manual and cost accounting review procedures, as
they may each from time to time be amended, and directs that the City Clerk notify the State
Controller forthwith of this election.
PASSED AND ADOPTED this day of 2017, by the Board of Directors of the
Central Contra Costa Sanitary District by the following vote:
AYES: Members:
NOES: Members:
ABSENT: Members:
President of the Board of Directors
COUNTERSIGNED:
Secretary of the District
Approved as to Form:
Counsel for the District
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Page 25 of 38
Appendix B
Sample Ordinance
ORDINANCE NO.
AN ORDINANCE OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT
ESTABLISHING INFORMAL BIDDING PROCEDURES UNDER THE
UNIFORM PUBLIC CONSTRUCTION COST ACCOUNTING ACT
WHEREAS, the Uniform Public Construction Cost Accounting Act (Act) provides for informal bidding
procedures for construction projects that have the potential to significantly reduce the administrative costs
of bidding and allow for faster project completion, while still retaining a competitive process and
containing project costs; and
WHEREAS, the District has elected to become subject to the uniform public construction cost accounting
procedures under the Act, thereby allowing it to adopt informal bidding procedures for construction
projects.
NOW, THEREFORE, the Board of Directors of Central Contra Costa Sanitary District does ordain as
follows:
Section 1. Informal Bid Procedures. Construction projects ("Public Projects" as defined by the Act) and
in accordance with the limits listed in Section 22032 of the Public Contract Code, may be let to contract
by informal procedures as set forth in Section 22032, et seq., of the Public Contract Code.
Section 2. Notice Inviting Informal Bids. Where a construction project is to be performed, which is
subject to the provisions of this Ordinance, a notice inviting informal bids shall be mailed, emailed or
faxed to all construction trade journals as specified by the California Uniform Construction Cost
Accounting Commission in accordance with Section 22036 of the Public Contract Code. However, if the
product or service is proprietary in nature such that it can be obtained only from a certain contractor or
contractors, the notice inviting informal bids may be sent exclusively to such contractor or contractors.
Section 3. Award of Contracts. The District General Manager, Deputy General Manager, Purchasing
and Materials Manager, and Director of Engineering and Technical Services are each authorized to
award informal construction contracts.
Section 4. This ordinance shall be a general regulation of the District and shall be published once in the
Contra Costa Times and the San Ramon Valley Times, newspapers of general circulation within the
District, and shall be effective on the eighth calendar day following such publication.
PASSED AND ADOPTED this day of , 2017, by the Board of Directors of the Central
Contra Costa Sanitary District by the following vote:
AYES: Members:
NOES: Members:
ABSENT: Members:
President of the Board of Directors
COUNTERSIGNED:
Secretary of the District
Approved as to Form:
Counsel for the District
May 3, 2018 Regular Board Meeting Agenda Packet- Page 161 of 275
Page 26 of 38
Appendix C
Trade Journal Notices
Notice to both of the following Statewide journals:
Construction Bidboard(eBidboard)
Attn: James Moriarty-CEO
11622 El Camino Real
San Diego, CA 92130
Phone: 800-479-5314
Fax: 619-688-0585
e-mail: planroomgebidboard.com
McGraw-Hill Construction Dodge
148 Princeton Hightstown Rd,N-1
Hightstown,NJ 08520
Phone: 609-426-7403
Fax: 888-359-5520
Jason.szafranskigmhfi.com
www.construction.com
Notice to two of the following six regional trade journals:
Marin Builders Association Bay Area Builders Exchange
660 Las Gallinas Avenue 2440 Stanwell Drive, Suite B
San Rafael, CA 94903 Concord, CA 94520-4801
Phone: 415-462-1220 Phone: 925-685-8630
Fax: 415-462-1225 Fax: 925-685-3424
e-mail: mba@marinba.org e-mail: infogbayareabx.com
www.marinba.org www.bUareabx.com
Placer County Contractors Association, Inc. Peninsula Builders Exchange
10656 Industrial Avenue, Suite 160 735 Industrial Road
Roseville, CA 95678 San Carlos, CA 94070
Phone: 916-771-7229 Phone: 650-591-4486
Fax: 916-771-0556 Fax: 650-591-8108
e-mail: planroomgplacerbx.com e-mail: tomkconstructionplans.org
www.pccamembers.com www.constructiopplans.org
Bay Area Builders' Exchange Builders' Exchange of Stockton
3055 Alvarado Street 7500 West Lane
San Leandro, CA 94577 Stockton, CA 95210
Phone: 510-483-8880 Phone: 209-478-1000
Fax: 510-352-1509 Fax: 209-478-2132
e-mail: spleary@beac.com e-mail:jluna(cr�,besonline.com
www.beac.com www.besonline.com
May 3, 2018 Regular Board Meeting Agenda Packet- Page 162 of 275
Page 27 of 38
Appendix D
Sample Cost Accounting Worksheet
Labor Hours Hourly Rate Total
Position -
Position -
Position -
Position -
Total Labor -
Materials and . .
Total -
Sales Tax
Delivery
Other Costs
Total Supplies and Equipment Costs -
Contract Services
Total Contract Services -
Equipment Use Hours Hourly Rate Total
Total Equipment Use -
Other Costs
Total Other Costs -
TOTAL -
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Page 28 of 38
CENTRAL CONTRA COSTA SANITARY DISTRICT
INSTRUCTIONS FOR ADOPTION AND IMPLEMENTATION OF THE UNIFORM
PUBLIC CONSTRUCTION COST ACCOUNTING ACT (ACT)
BY LOCAL AGENCIES
1) The Governing Board must elect by resolution to become subject to the uniform
construction cost accounting procedures promulgated by the State Controller
pursuant to the Public Contract Code, Section 22019. The resolution shall
specify that the local agency will meet the requirements prescribed in the
California Uniform Construction Cost Accounting Commission's Cost Accounting
Policies and Procedures Manual and state the effective date the agency will
implement the accounting and bidding procedures.
2) The local agency must notify the State Controller in writing of the election to
become subject to the uniform construction cost accounting procedures along
with a copy of the resolution mailed to the following address:
Office of the State Controller
Local Government Programs and Services Division
Local Government Policy Section
P.O. Box 942850
Sacramento, CA 94250
3) When a local agency elects to become subject to the uniform construction cost
accounting procedures, the entire entity is considered subject to the Act and no
departments will be exempt. However, Special Districts which are governed by
a board of supervisors or city council are subject only if a separate election is
made.
4) An informal bidding ordinance, or a board adopted policy equivalent to such as
required by the participating agency, shall be enacted pursuant to Public
Contract Code, Section 22034.
5) Once opting into the Act, participating agencies must always adhere to the terms
of the Act until such time the agency formally opts out by resolution of its
governing board. Having opted in, selective adherence to the terms of the Act
is a violation.
6) The governing board may discontinue the agency's participation under the
uniform public construction cost accounting procedures by adopting a resolution
stating this fact. A copy of the resolution shall be filed with the State Controller.
7) The State Controller shall notify the California Uniform Construction Cost
Accounting Commission (Commission) of all local agencies electing to become
subject to the uniform public construction cost accounting procedures. In
addition, the Commission shall also be notified of local agencies electing to
discontinue participation under these procedures.
May 3, 2018 Regular Board Meeting Agenda Packet- Page 164 of 275
77
IV
PUBLIC HEARING ON ADOPTION OF
UNIFORM PUBLIC CONSTRUCTION COST
ACCOUNTING ACT ( UPCCAA)
PHILIP R. LEIBER
DIRECTOR OF FINANCE AND ADMINISTRATION
_�\
MAY 33 2018
OVERVIEW
The Uniform Public Construction Cost Accounting Act
(UPCCAA) was enacted in 1983 to help promote uniformity
of cost accounting standards and bidding procedures on
construction work performed or contracted by public entities.
The UPCCAA has been adopted by over 1 ,000 California
local governmental agencies, including 300 special districts.
Staff recommends adoption by Central San to streamline
purchasing requirements for lower value work.
ar - -
OVFRVIEW
Sanitary districts are required to follow formal bidding
procedures for "District Projects" greater than $ 15K.
UPCCAA provides higher bid limits:
Current Central UPCCAA
San Procedures
No specific bidding Less than $5,000 $45,000 or less
requirements
Informal bidding $5,000 to $15,000 $45,001 to $175,000
Formal bidding More than $15,000 More than $175,000
* AB 2249, effective January 2019, would increase limits from $45K to $60K and from $175K to $200K
Higher limits will enable more efficient processing , saving
time and administrative costs.
-i
ar - -
BACKGROUND
Adoption of LIPCCAA has been assessed by
Central San in the past including :
2006 analysis
Benefits did not appear to outweigh the costs (including
additional staff time on accounting procedures, bidding
procedures and project management duties).
Relatively few number of projects in the range of $15,000
to $175,000, and Central San's practice of grouping
smaller projects together for bidding purposes.
2014 internal "white paper" and consultant retained
Consultant report issued in 2017 recommended adoption of
the UPCCAA on a pilot program basis.
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WHY THIS IS IMPORTANT
An estimated 20 to 40 high priority/rush requests
annually to Purchasing for maintenance/repairs
between $ 15K-$45K.
Operations seeks expedited process, yet needs to
meet District purchasing procedures and legal bidding
requirements.
Maintenance vs. Repairs (public works)
More delays anticipated with increasing size of
Capital Budget. Alternatives:
Staff additions, or
Process improvements, such as adopting
��t �. ,• U PCCAA.
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. R CONSIDERATIONS
2016 Court Ruling — Ross Valley Sanitary District
Statute requiring competitive bidding for sanitary district
projects greater than $15K does not apply when the
district engages its own work force to perform the work.
However, adopting the UPCCAA would eliminate some
of the benefits of this current favorable ruling to sanitary
districts, restricting use of district forces for projects over
$45K.
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SUMMARY CONSIDERATIONS
Advantages • Increase $15,000 threshold for bidding public project work to $45,000*.
• Streamlined bidding process for public project work from $45,000 to
$175,000* with award to lowest responsible bidder.
• Agencies who have adopted the UPCCAA cite:
➢ Expedited contracting for small projects.
➢ A potentially faster award process.
➢ Improved timeliness of project completion.
➢ Simplified administration.
➢ Elimination of considerable red tape and cumbersome paperwork
relative to advertising and filing of reports.
➢ With respect to the advertising/notification process for work subject
to informal bidding, the UPCCAA allows agencies to:
(1 ) maintain a bidder's list by type of work;
(2) notice particular construction trade journals; or
(3) do both.
Disadvantages Lose the current ability (through Ross Valley decision) to perform work
with in-house staff without regard to project size.
* Scheduled to increase from from $45K to $60K and from $175K to $200K effective January 2019
-
# ar P;4np 171 nf 97r;
IMPI EMENTATION TIMELINE
Administration Committee Hearing of Matter February 2018
Public Hearing on Ordinance May 3, 2018
Internal Implementation-including but not limited to: May — August
• Bring revised GM Delegation of Authority addressing
award of informally bid contracts by GM
• Develop and implement informal bid procedures
• Develop informal bidder's list
• Train staff on changes
• Vendor communications
Go-live September 1 , 2018
Initial Report to Admin Committee December 2018
Formal Report to Board One to two years after go-live
rr,
.,f.
>,
ar -
RECOMMENDATION
Adopt the proposed resolution and ordinance
(Attachments 1 and 2 , respectively) for
Central San to adopt the Uniform Public
Construction Cost Accounting Act.
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QUESTIONS AND DISCUSSION